House votes on student loan cut

Rachel Abbey

The House of Representatives approved the Senate version of the budget reconciliation bill yesterday, The Associated Press reported.

At this point, President Bush needs to sign the bill for it to become a law, making major cuts in the federal budget including student loans, Medicaid and Medicare.

Bush briefly mentioned non-security spending in his State of the Union Address Tuesday, saying his administration has reduced these expenses every year and intended to do so again.


Changes in the following programs have been proposed for the years 2006 to 2010:

• Agriculture would create $2.7 billion in savings.

• Housing and insurance would create $520 million in savings.

• Digital television would create $7.4 billion in savings.

• Medicare would create $6.4 billion in savings.

• Medicaid and children’s health would create $4.7 billion in savings.

• Human resource-related and other would create $1.5 billion in savings.

• Education and pensions would create $15.5 billion in savings.

• Low-income home energy would create $625 million from 2007 to 2009.

Source: Congressional Budget Office

The Bush administration proposed cutting non-security discretionary spending in the next year by almost 1 percent, according to an overview of the budget from the Office of Management and Budget’s Web site. Cuts this tight have not been proposed since the Reagan administration.

The process works like this: The president submits his budget proposal to Congress, who then draft bills determining how much funding programs will receive.

These bills, called appropriation bills, need to be re-approved every year. There are about 13 such bills, said Rich Walker, communications writer at the Office of Management and Budget.

Mandatory programs, such as Medicare, Medicaid and Social Security, are not affected by appropriation bills, Walker said. However, a budget reconciliation bill to realign total spending can amend the details of the programs and reduce their funding.

A reconciliation bill tries to balance the budget of the federal government, said Constance Hawke, director of federal relations and associate university counsel. Congress will cut funds for a wide range of projects, not only higher education.

According to a Congressional Budget Office cost estimate, if the bill is signed as is, it will reduce program spending by an estimated $39 billion by 2010. While the largest savings would come from student loans, cuts in medical, agricultural and child care programs also would reduce federal expenses. While some programs may actually receive more funding, the bill would create overall savings through cuts or raised prices for services within the programs.

Contact administration reporter Rachel Abbey at [email protected].